Obama's DOJ And Wall Street: Too Big For Jail?

“The appearance of conflict is as dangerous to public confidence in the administration of justice as true conflict itself. Justice must not only be done; justice must also be seen to be done.” –Lloyd Cutler, 1981

Over the past three years, the Department of Justice has filed criminal charges against hundreds of ordinary Americans for financial fraud. But no one from the largest banks and firms on Wall Street have been similarly charged for events leading up to the financial crisis. Could that be because those banks are clients of the firms from which top DOJ officials hail?

In November 2009, President Obama established the Financial Fraud Enforcement Task Force to deal with financial crimes related to the 2008 financial crisis. As Attorney General Eric Holder, chairman of the Task Force, explained at the time: “This Task Force’s mission is not just to hold accountable those who helped bring about the last financial meltdown, but to prevent another meltdown from happening. We will be relentless in our investigation of corporate and financial wrongdoing, and will not hesitate to bring charges, where appropriate, for criminal misconduct on the part of businesses and business executives.”

None of that happened. The Task Force is still humming along almost three years later, but its highlighted successes are less “business executives” than ordinary Americans who have had the book thrown at them. From their website:

Ten people in Las Vegas have been criminally charged with conspiracy to commit mail and wire fraud in a “scheme to fraudulently control” Condominium Home Owners Associations. They have pled guilty and face up to 30 years in prison.

Certainly there have been opportunities to aggressively investigate criminal acts of fraud involving the largest banks and investment houses. The SEC has alleged that half a dozen banks “knowingly” passed fraudulent information along to government agencies and investors. The same charges have been leveled against several of the largest investment houses as it relates to subprime mortgages.

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